Fear was my main motivation to take a hard look at my finances and get aggressive in setting my financial goals. Fear that I was far behind in what my savings would have been should I have started earlier, and fear that I would be stuck in a situation (such as a bad job) without any place to go.
I was Afraid I was Behind
When I was in grade 11 and grade 12, I had a wonderful math teacher who taught us about the potential we all had, thanks to the miracle of compounding interest. She introduced me to a book called “She Laughed all the Way to the Bank” by Cindy Skrukwa. And my teacher emphasized the fact that if I start investing just a small portion each year, maybe just $1,000 a year when I’m 18 or when I turn 20, I would be better off than most people to securing my financial future.
She was right. And you know what I did?
I was working at McDonald’s on weekends and tutoring math and science on weeknights, but I saved all that in my bank savings account to use in University. The thought that I might have an extra $1,000 a year to put in something that was untouchable until I turned 65 was unthinkable. What if I needed the money?
I took out a student loan from the government (which was interest free until I graduated), and I worked in internships between school terms to fund my education. I usually made enough during the internships to cover my expenses for the internship itself, and for tuition and living expenses the following school year. But it felt like I had no wiggle room to contribute towards retirement, and the motivation to do so soon left me.
I graduated from my Degree almost 5 years later, and I picked up that book again. Then I got scared.
I hadn’t put away anything during my 5 years in school. Even though I felt like I was given a great secret by my high school math teacher, it was too late to execute it. And I felt like I failed my teacher, and myself.
Fear of Being Stuck
I have heard of so many people being a slave to their jobs because that is the only way they could afford to live. Their job was their livelihood, and there were bills to be paid. There was no time for fun, and no time for life.
Last year during the recession, a friend told me that their boss asked them how their investment portfolio and rental income was doing. When my friend replied, “Not so great.” His boss said, “Good. Now you will be here for a while.” At the same time, his boss refused to give him a promotion or a raise, even though he kept taking on more responsibility.
I was afraid because I never wanted to be in that position. I never want to continue working at a place that I don’t want to, just so that I can pay the bills. I will live frugally and save diligently, but I do not want to be owned by my workplace.
After a bit of a pity party, I picked up my calculator and decided to figure what I needed to do to get myself back on track. Better 5 years later than never, right?
I talked to my parents about how they budget (and they are amazing budgeters!) I read blogs. I read books. I looked into what RRSP’s were, and how I could use them. I looked into what my company offered for resources and vehicles to save. I started to track my spending, and save towards paying off my student loans. I did everything that I could think of to catch up.
I worked out what my personal cost of living was and came up with a budget. I came up with a savings goal. I learned that no one cares more about my money than me. And now, I am tracking my progress with this blog and sharing with you my experience. I try to live frugally and simply, so that I can enjoy my life, and not have to fear that I am not in charge of my own future.
What motivates you to save or spend? Is fear a motivation for you?